Obama urges full payroll tax cut extension without 'drama' in new year

By By Michael A. Memoli

Dec 17, 2011 | 9:54 AM

President Obama

said Saturday that he was "very pleased" that Congress has reached agreement on a short-term extension of a payroll tax holiday and unemployment benefits, and quickly urged lawmakers to work on extending the provisions after the holiday recess.

"While this agreement is for two months, it is my expectation -- in fact it would be inexcusable for Congress not to further extend this middle-class tax cut for the rest of the year," Obama said in a statement to reporters at the

White House

.

"It should be a formality, and hopefully it's done with as little drama as possible when they get back in January."

The

Senate

had earlier overwhelmingly approved the tax break in a rare Saturday session. The final deal includes a provision the White House had opposed that speeds up a decision on the controversial Keystone XL pipeline.

But Obama said it was crucial that families not see an increase in taxes on Jan. 1, and said the continued break would boost the economy.

Democrats

had sought a surtax on millionaires to pay for a full-year extension, while

Republicans

wanted steep budget cuts. The short-term deal is funded by new fees on home loans from

Fannie Mae

and

Freddie Mac

.

Obama said that in the new year he would renew a call for the "wealthiest few Americans to pay their fair share, and corporations to do without special taxpayer subsidies," saying that view was supported by most of the country.

The House is expected to finalize the deal on Monday, and Obama would likely quickly sign it. He has delayed his annual holiday visit to Hawaii until the deal is approved.